HUD Official Alleges Beazer Probe Was Soft-Pedaled

The inspector general of the Department of Housing and Urban Development is accusing the Department of Justice of soft-pedaling its investigation into Beazer Homes, an Atlanta-based homebuilder that was at the heart of the nation's housing crisis.

Photo: Jeff Turner

Foreclosure

According to documents obtained by CNBC, the inspector general claims the Department of Justice blocked an investigation and watered down the settlement amount that Beazer ultimately paid.

Inspector General Kenneth Donohue also complains that U.S. Attorney General Eric Holder has not responded to a letter he sent on this matter in July. Today, Grassley sent his own letter to Holder asking for a response to the inspector general's allegations.

Representatives for Beazer and the Department of Justice did not respond to CNBC's request for comment.

Shares of Beazer , which closed at $4.12 in regular New York trade, were lower in extended trading.